Ladies and gentlemen, thank you for standing by. And welcome to the Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. And later, we will conduct the question-and-answer session, instructions will be given at that time. (Operator Instructions) As a reminder, today’s call is being recorded. I’d now like to introduce our host, President and CEO, Mr. Mike Magusiak. Please go ahead.

Thank you. Welcome to our conference call. I'm Mike Magusiak and I'm joined by our Chairman Dick Frank and Tiffany Kice, our Executive Vice President and Chief Financial Officer. Before we begin today's discussion, I would like to make you aware that some of the information presented today may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those implied in the forward-looking statements. Information regarding the company's risk factors was included in our press release and is also included in the company's filings with the SEC. Reconciliation information related to non-GAAP financial measures discussed on this call may be found in the company's second quarter earnings release and on the company's website under Investor Information. Tiffany will begin today’s call with an overview of our financial performance during the second quarter of 2013. I will then discuss our sales performance to-date, our strategic plan and our growth opportunities. Tiffany will then go over our business outlook for the remainder of 2013 and finally, Dick will provide concluding remarks before we open the call for Q&A. Tiffany?

Thank you, Mike, and good afternoon everyone. Comparable store sales for the quarter increased 2.9% with April up 4.7%, May up 2.1% and June up 1.9%. We continue to believe that certain components of our strategies are gaining traction. Diluted EPS increased to $0.42 for the second quarter of 2013 as compared to $0.23 in the prior year. I will now walk you through the details of our financial results. Total revenues increased $9.5 million or 5.2% to $191.9 million at the second quarter of 2013. The comparable store sales increased by 2.9%, contributed $5.1 million to the overall increase and 4.2 million of the increase was derived from new company owned store opening since the second quarter of 2012. Cost of food, beverage, entertainment and merchandize as a percentage of company store sales decreased 100 basis points. We believe this decrease was primarily attributable to an approximate 20% reduction in dough usage as a result of our new thinner, more crispy pizza crust and the modification of our price and merchandize category, both implemented in March 2013 along with changes in our pricing strategy that were put in place in the fourth quarter of 2012. These benefits were partially offset by $0.25 or 16.3% increase in the average price per pound of cheese during the second quarter of 2013. Labor expenses as a percentage of company store sales decreased 60 basis points to 28.9%. As our increase in labor costs were outpaced by our increase in sale. In addition we experienced a decrease in workers compensation and health insurance cost during the second quarter of ‘13. These benefits were partially offset by an increase in store level sales and performance bonuses due to improved results. Depreciation and amortization and rent expense collectively decreased 80 basis points to 20.2% in…

Thanks, Tiffany. We continue to believe that we have developed a very solid sales plan to increase comparable store sales, grow our concept with both domestic and international new locations and improve our profit margins. As Tiffany noted revenue in the second quarter increase $9.5 million or 5.2% compared to the same quarter last year. Comparable store sales increased 2.9% and contributed $5.1 million towards the revenue increase. The remaining revenue increase of $4.4 million was primarily attributable to new store development. The combination of increased revenue and the continued implementation of our profit strategies improved our operating margins by 250 basis points in the second quarter compared to the same quarter last year. Comparable store sales during the second quarter by region are as follows. The Western was positive 3.2%, the Central was positive 3.5%, the Northeast was positive 2.9% and the Southeast was positive 1.9% for the quarter coming in at 2.9% positive. Comparable store sales in the first half of 2013 by region are as follows. The Western was positive 1.5%, the Central was positive 3.1%, Northeast was positive 2.0% and the Southeast was positive 2.1% for the first half coming in at 2.2%. From a comparable store sales perspective, we are encouraged that each of the regions of the country had positive comparable store sales. However, our sales do fluctuate on a month-to-month basis based on many factors some of which are external in nature. Comparable store sales in July decreased by 2.3%, as we've not materially modified any of our strategies, we believe July was negatively impacted by significant increase in G and PG movies over the short time horizon. To provide a perspective of the potential impact of kids’ movies on sales, according to the website, Box Office Mojo, box office receipts for G…

Thank you, Mike. Through the end of July, our comparable store sales are up 1.6%. At this time we continue to anticipate an increase in comparable store sales of 1.5% to 2.5% for the full fiscal year. We are increasing our diluted earnings per share guidance to be in a range of $2.90 to $3.05 as compared to the range of $2.80 to $2.95 given on our last call. Incorporated into this guidance are the following assumptions for fiscal 2013. 12 to 15 new company-owned stores including one store relocation, average cheese block prices in the range of $1.75 to $1.85 per pound, depreciation and amortization to remain relatively flat with prior year, rent expense to increase approximately 4% to 5% from the prior year, advertising expense to increase approximately $6 million from the prior year to support our comprehensive and multifaceted advertising plan, capital expenditures to range from approximately $75 million to $80 million and payment of four quarter dividends totaling approximately $17 million. I will now turn the call over to Dick for some concluding remarks.

Thanks, Tiffany. Financial highlights for the second quarter include a $9.5 million increase in total revenue with both comparable store sales in new company owned locations making significant contributions to the sales increased, diluted earnings per share increasing 82.6% to $0.42 for the quarter as compared to $0.23 in the prior year quarter, payment of $4.1 million in cash dividends, and lastly share repurchases totaling $8.1 million of our common stock. Although sales and profits can fluctuate over short periods of time, we do believe the certain components of our strategies are contributing to our overall performance. Among these key strategies are the comprehensive marketing plan targeting both kids and moms. The continued executions of our value proposition supported by multimedia advertising initiatives and enhanced strategy of reinvestment in our existing locations, the growth of our brand both domestically and internationally, and lastly our ongoing commitment to returning capital to our shareholders through cash dividends and the continuation of our share repurchase program on an opportunistic basis. As Tiffany said, we continue to anticipate an increase of comparable store sales for the fiscal year of between 1.5% and 2.5%. At this time Mike, Tiffany and I will be glad to answer any questions that you might have.

(Operator Instructions). And our first question will go to the line of Michael Gallo with C.L. King.

Question on the advertising, I guess if I look at the numbers, it looks like of the $6 million increase, $5.3 million of it occurred in the first half, it seemed like that coincided with an improvement in sales. I was wondering with the advertising up year-on-year in July, and my recollection was you didn't have a lot of advertising spend last July, but then also why not think about increasing the advertising in the back half of the year given that you've seen certainly a slowdown in trend and particularly looking at the two years stack, my recollection is July of last year was a fairly soft month at down 3.3%. So, probably with the thinking on, how we should think about advertising going forward?

That's a real good question, Michael. It's a little bit deceiving, because we do have a very strong media plan, television advertising for the second half of this year. The reason that expenses went up so much in the first half of the year is that, we started a commercial earlier than originally anticipated and whenever you air that commercial, the total production cost is expensed when that commercial starts. So what you have in the second half of the year is the significant reduction in production costs for the production of commercials, but then if you look at trip levels in dollars, in other words national media advertising on TV, we have a very strong plan in the second half of the year. Our advertising trips, the number of commercials that kids and parents will see are up about 40% in the second half of this year versus the second half of last year.

That's helpful. Second question, Mike I was wondering if you could speak at all for the consumer it seems like throughout the restaurant and entertainment category that there's been some slowdown over the last six weeks or so. It seems like you've seen certainly a slowdown in your July trends, I know you cited the movie calendar. I was wondering if you can give us any further color on what you are seeing out of the consumer here in July, was it that you saw that just a number of people coming in was last, the coupon redemptions were up, was it a mix of food versus entertainment revenue that was changing, so anything that can give us more comfort that it really is just a movie calendar not what we see kind of broadly in terms of some slowing in the category? Thank you.

No, thank you, Michael. I'll do my best approach at it. I think first I'll start broad and it is a little bit difficult because movies have increased so dramatically in the first four weeks of July but let me start broad and then I'll get into July. I think first of all, if I look at sales, we are positive five out of the six periods in the first half of 2013 and then I look on a region-by-region basis, in every region of our country was positive not only in the second quarter of this year but also on a year-to-date basis and so then you look at each region’s positive. The worst region that we've had so far this year through six periods is positive 1.5% on with the best region being positive 3.1%. I mean inside look at July and we have made no significant modifications for our strategy and also believe that we have a strong promotion going on currently and which is Every Kid’s a Winner. We consistently hear from our operators that kids are excited to say come into our door, that they know they are going to win some tickets or tokens or a trip in the Ticket Blaster and then as I said earlier, we have a very significant increase in our advertising spend starting in July and for the rest of the year. So then you look at it that the reality is, our sales are volatile over a short period of time but they have really been consistent across the nation through the first half of the year and then we look at movies and the movies and this is just G and PG movies and Tiffany has dollars by movie. She can give you those but in total, G and PG movies increased $261 million and that was the increase in movie receipts, well that increase represents 4.5 times our total core sales in July. So even if you had a small percentage of those movie goers that who have gone to Chuck E. Cheese, it would had a fairly significant impact on our comps. So that’s what we see when we look at the movies, so it’s hard to tie in what you may be seeing in other restaurant companies, I think that we have a very solid plan the second half of the year. We’ve had a good first half of the year and maybe there are some consumer slowdown but when we look at it the one factor that we’ve looked at more any other is the external factor of movies. So that’s the best I can do to try to explain that for you Michael.

(Operator Instructions). Next we go to the line of Will Slabaugh with Stephens Inc. Please go ahead.

Yes thanks guys. I wanted to follow up on the July question if I could. Didn’t know if you notice anything unusual with weather, any in-break of the regions in July, I didn’t know if have in front of you as far as if there were any geographic areas that were weaker or shorter than the others and does make sense if the movies would impact us, I am wondering if there is anything else that would make it parse out?

I’ll give it to you by region in July, the Northeast was negative 1.2%, the Southeast was negative 1.1%, the Central was negative 8.1% and the West was positive 1.8%.

Got it. That’s helpful. And one question I had about the guidance, you know for the first half of the year, you have been pull up some pretty nice leverage on our labor line and other restaurant expense lines. And as a walk to my model it looks like you will likely be able to hit that guide on a lower comp than what you are guiding. So I am just wondering if there are some other costs that I should be thinking about there, such as cheese that you call out, or if there is just maybe some conservatism in your guide concerning what you’ve seen so far in July?

Will, it’s Tiffany. At this point really the guidance that we have given you is our best estimate and what we think that the fiscal year is going to be with the comp range of 15 to 25, I don’t think there is anything that we have in kind of outlined in the line items that you should probably be thinking about.

Thank you. And at this time there are no further questions, please continue.

We appreciate your participation in our conference call. And if you have any further questions, please feel free to call Tiffany, Dick or myself. Thank you very much.

Ladies and gentlemen, that will conclude our conference for today. We thank you for your participations and for using AT&T Executive Teleconference. You may now disconnect.